BUYING IN BULK

KAREN DeMASTERS

Consumers continue to exhibit a desire to treat themselves with sweets, and supermarket retailers are taking full advantage by placing colorful bulk candy displays in easily accessible areas of the store.

Some store managers and owners told SN they are even appealing to customers' romantic side by placing the attractive, random-weight candy bins near the floral department for those who want to take home the traditional candy and flowers to a loved one.

"Candy, and particularly candy purchased by the ounce or pound, is bought on impulse more than any other category in the supermarket," said Kevin Fitz, category manager for Associated Food Stores, Salt Lake City.

"Our candies have done well in bulk, especially in the summertime," added Fitz, whose company has approximately 600 stores. "There is no set floor plan from one store to the next, but for the stores where we control the floor plan we put the bulk candies at the end of the aisle near the produce. We have sort of trained consumers to look for the bulk candy in that location."

Associated Foods now deals with 77 candy companies, 25 of which supply candy in bulk as opposed to prepackaged candy in standard-weight amounts, but the company is in the process of revamping all of its categories that are sold by bulk weight.

"We want to do more with fewer suppliers in all the categories," Fitz explained. "Bulk candies are used as promotional items, particularly the seasonal ones, to bring people into the store."

In 2000, total candy sales were $23.8 billion, according to the latest statistics from the National Confectioners Association and the Chocolate Manufacturers Association, both based in McLean, Va. That included consumption of 3.3 billion pounds of chocolate and 3.1 billion pounds of other candies.

It is estimated that bulk candy sales totaled around $1 billion. Based on growth trends, the NCA estimates sales of bulk candies in supermarkets has grown from about $387 million in 1997 to about $425 million last year, said Jim Corcoran, association spokesman. The sales figure for supermarkets is an educated guess, since specific statistics are not kept for those sales, and the figure could range even higher, he said.

According to ACNielsen, Schaumburg, Ill., 32% of all U.S. households purchased candy by bulk weight during 2000, and more than half of those purchasers -- 54% -- bought bulk candy more than once that year.

Among households purchasing candy by random weight, the average household spent $13.70 on this category during 2000, and more than half of those purchases, 56.2 %, were made in supermarkets, according to the market research firm.

Some supermarkets, such as Scolari's Food and Drug Co., Sparks, Nev., deal largely or exclusively with one provider of bulk candy, such as Brach's.

"We handle primarily Brach's specialty candies because they are individually wrapped and that satisfies people's concerns about sanitary conditions," said Charles Jones, senior buyer for Scolari's, which has 19 stores in Nevada and California. "But we also have two specialty chocolates sold in bulk in two of our more upscale stores."

There is enough demand for bulk candies to justify a separate display in the stores, most at least 6 feet wide by 3 feet tall even in the smallest stores.

"We put the candy between the produce, where items are bought by weight, and floral because maybe a customer wants to buy candy and flowers," he added.

One of the large manufacturers of bulk and prepackaged candies, Harmony, Santa Cruz, Calif., reports bulk candy is holding its own nationwide with increasing popularity in some areas.

"It goes in waves and changes area by area. It is a very dynamic situation. In some areas consumers are moving toward packaged candies, but in others bulk candies are doing well," said Jim Hanlon, president and chief executive officer, Harmony.

Harmony is one of the companies that is moving away from the large acrylic containers. Although attractive, they are not as easily maintained as other types of containers and are difficult to refill and keep clean.

"We prefer to present a large, disposable, plastic bottle. It can be replaced with a new bottle, and the remaining candy from the old bottle can be put on top in the new display," Hanlon said. "In that way it is easier to maintain, it keeps the section looking nice longer and is easier to keep in good shape."

Harmony will do a complete, direct-store service, providing all service for the candy section for the retailer, thereby saving the retailer the labor costs of maintaining the section.

"We will go in once a week or twice a week for those with large turnover and put in new containers, make sure the scoops are there and do everything that is needed to keep it fresh. When we can do a complete service is when we have the most success, where the program has the largest turnover and looks the nicest," Hanlon explained.

All candies come with nutritional labeling for the consumer.

The company also handles a complete line of trail mixes, nuts and yogurt-covered candies that are sold in the bulk candy section, which appeals to the nutritionally aware, he added.

The natural and organic types of snack and candy items appeal to companies like Wild Oats, Boulder, Colo.

"Our staple is bulk products, and natural and organic products," said Sonja Tuitele, director of corporate communications for the company, which includes Nature's Wild Oats in the Pacific Northwest, Capers in British Columbia and Henry's Marketplace in Southern California. "Our customers are environmentally sensitive and there is less packaging when purchasing in bulk. Some people even bring their own bags back for refills," she added.

Traditional candies also are maintaining popularity in stores such as Frank's Country Market, which has two stores in Jefferson, Wis., where the bulk candy section was recently expanded from 16 feet to 24 feet of floor space to accommodate 20 stockkeeping units rather than the previous 12. Approximately 85% of bulk sales are from individually wrapped candies, but the chocolates and other unwrapped varieties are continuing to grow in popularity.

"We put the bulk candy in with the other candies, but in the traffic flow it is before you get to the prepackaged candies," said Frank Lueptow, owner.

Mass merchandisers in the Wisconsin area are carrying bulk candies, but Lueptow has noticed little effect on his stores' sales.

"Although it has to have some effect, we are expanding, not diminishing, our space, so mass merchandisers are not hurting us in this category. We also add several SKUs of bulk candy during the holiday seasons," he added.

Brown & Cole Stores, Bellingham, Wash., also has found success with bulk candies in its 35 stores in Washington, Oregon and Montana. Like other retailers that spoke with SN, many of the stores place the bulk candies near the produce section where all items are sold by weight.

Stores vary in size and can have anywhere from 150 to 300 SKUs, including nuts and trail mixes, with added items during Valentine's Day, Easter, Halloween and Christmas, said Chuck Beebe, the chain's bulk buyer. Premium chocolates, hard candies and Gummy Bears are popular all year, he said.

"We have a bulk food manager in every store, and that effort is supplemented by service from the vendor in some cases," Beebe said. "The vendors are the experts on color displays."

Pre-bagged bulk candies and nuts are used as promotional items and cross merchandised with other snacks.

"We feature a bulk candy or nut selection on a regular basis in our weekly advertisements, and we have found it makes a big difference in sales," he added. "We devote larger displays to items that have a high turnover, and more emphasis is now being placed on natural products because that is the trend nationwide."

In the past, Brown & Cole sold some dinner-preparation items in bulk, but some of that space is now being taken over by candy and snack items.

"Our focus on candy and snacks is growing, and we are finding it to be a strong category," Beebe said.